Buying a home in Chicago is a great deal – so long as the owner stays in it for at least two years.
That was the conclusion of Zillow’s latest Breakeven Horizon report, which calculates how long the average homeowner has to stay in a home before it makes more financial sense than renting.
Nationwide, the breakeven horizon in 2016 was 1 year and 11 months. According to the report, that’s a 20-day increase from 2015, and the result of a widespread slowdown in home price appreciation.
Buying in Chicago, however, a person needs to own his or her home for two years before it makes more financial sense than renting (assuming the home appreciates 4.84 percent in the first year). While that’s a high breakeven horizon for Illinois – the highest in the state, in fact – it’s lower than most other major metropolitan markets.
|City||Median Breakeven Horizon (in years)||Annual Change in Breakeven Horizon (in years)|
Since 2015, Chicago’s breakeven horizon has decreased almost 33 days, a reflection of both rising rental rates and strong home value increases.